Montgomery County Quarterly Economic Indicators October 2015 · Finally, the October WSJ survey of...

Montgomery County Quarterly Economic Indicators October 2015

1

The purpose of this report is to keep policy makers apprised of changes in

the national and local economies that

the Montgomery County Department of Finance

believes may impact current and/or future revenues and expenditures.

This report is also available through the Internet

on the Montgomery County Web Page:

http://www.montgomerycountymd.gov

For questions regarding this report, please contact:

David Platt

Chief Economist

Montgomery County Department of Finance

101 Monroe Street, 15th Floor

Rockville, Maryland 20850

Phone: (240) 777-8866

Email: [email protected]


2

INTRODUCTION

This quarterly report provides an analysis of national, regional, and Montgomery

County economic indicators for the third quarter of 2015. The data presented in this

report are not seasonally adjusted to insure comparability among the national, regional

and Montgomery County economic indicators. Since the data are not seasonally adjusted,

the comparative periods for the quarterly data are the third quarter of this calendar year

and the third quarter of calendar year 2014. The only data that are seasonally adjusted are

the national real gross domestic product (GDP) and its components.

NATIONAL ECONOMY

According to the advance estimate by the Bureau of Economic Analysis (BEA), U.S.

Department of Commerce, real gross domestic product (GDP) increased at a 1.5 percent

seasonally adjusted annual rate during the third quarter of 2015. That increase followed an

increase of 3.9 percent during the second quarter. Based on the October 2015 Wall Street Journal

(WSJ) survey of fifty economists, the average of the responses expect economic growth to

increase 2.7 percent during the current fourth quarter, and an average of 2.6 percent for the four

quarters in 2016. Following its September meeting, the Federal Open Market Committee

(FOMC, Committee) of the Board of Governors of the Federal Reserve System released its latest

economic projections from 2015 to 2018 (the next scheduled release of its economic projections

is in December). Real GDP is expected to increase between 2.2 and 2.6 percent in 2016,

between 2.0 and 2.4 percent in 2017, and between 1.8 and 2.2 percent in 2018.

-2.7%

2.0%

-1.9%

-8.2%

-5.4%

-0.5%

1.3%

3.9%

1.7%

3.9%2.7%2.5%

-1.5%

2.9%

0.8%

4.6%

2.7%1.9%

0.5%0.1%

1.9%1.1%

3.0%3.8%

-0.9%

4.6%4.3%

2.1%

0.6%

3.9%

1.5%2.7%2.5%2.7%2.6%2.6%

-10.0%

-8.0%

-6.0%

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

20

08:I

20

08:I

I

20

08:I

II

20

08:I

V

20

09:I

20

09:I

I

20

09:I

II

20

09:I

V

20

10:I

20

10:I

I

20

10:I

II

20

10:I

V

20

11:I

20

11:I

I

20

11:I

II

20

11:I

V

20

12:I

20

12:I

I

20

12:I

II

20

12:I

V

20

13:I

20

13:I

I

20

13:I

II

20

13:I

V

20

14:I

20

14:I

I

20

14:I

II

20

14:I

V

20

15:I

20

15:I

I

20

15:I

II

20

15:I

V (

est

.)

20

16:I

(est

.)

20

16:I

I (e

st.)

20

16:I

II (

est

.)

20

16:I

V (

est

.)

Percen

t C

han

ge

Year:Quarter

Percent Change in Real GDP

SOURCE: Bureau of Economic Analysis, U.S. Department of Commerce. Hatched bars from Wall Street Journal survey

conducted October 2015.

NOTE: Percent changes are at annual rates.


3

Data released by BEA for the third quarter showed that the increase in real GDP was

attributed to an increase in personal consumption expenditures, residential and non-residential

fixed investment, and federal and state and local government spending. However, the

deceleration in GDP from 3.9 percent in the second quarter to 1.5 percent reflected a decline in

private inventory investment, and decelerations in personal consumption expenditure, residential

and nonresidential fixed investment, exports, and state and local government spending.

Real final sales of domestic product (real GDP less the change in private inventories)

increased 4.3 percent in the third quarter compared to an increase of 6.2 percent during the

second quarter. Real final sales are a good measure of future production. If the growth rate in

real final sales exceeds the growth rate for GDP over an extended period of time, it indicates

strong demand and an expansion of the national economy. For the third quarter, the percent

increase in real final sales (4.3%) was greater than the percent increase in real GDP (1.5%)

which suggests that future growth in real GDP during the fourth quarter of 2015 and increase to

2.6 percent in 2016 as projected in the WSJ October survey.

The survey of economists expects the jobless rate to be at 5.0 percent by December down to

4.7 percent by December 2016, and down further to 4.6 percent by December 2017. Projections

by the FOMC in September suggest that unemployment will gradually decrease to 4.7-4.9

percent by the end of 2016. Finally, the October WSJ survey of economists also shows that

inflation, as measured by the consumer price index (CPI), will increase a meager 0.8 percent in

December, increase to 2.1 percent by December 2016, and increase to 2.3 percent by December

2017. Inflation, as measured by the personal consumption expenditure (PCE) index, the

preferred measure of inflation by the FOMC, will increase slightly between 1.5 and 1.8 percent

by 2016.

Subsequent to its October 27-28 meeting of the FOMC, the Committee stated that “economic

activity has been expanding at a moderate pace. Household spending and business fixed

investment have been increasing at solid rates in recent months and the housing sector has

improved further.” However, the FOMC also noted that net exports were weak and growth in

payroll employment slowed, while the unemployment rate did not improve. The FOMC stated

further that “inflation has continued to run below the Committee’s longer-fund objective.” The

Committee also stated that it “is maintaining its existing policy of reinvesting principal payments

from its holdings of agency debt and agency mortgage-backed securities and of rolling over

maturing Treasury securities at auction” and voted to keep the target federal funds rate at

between 0.00 and 0.25 percent to “support continued progress toward maximum employment

and price stability.”

Following the meeting of the FOMC, the financial press reported that investors believe that

there is a 50-50 percent chance of a rate increase in December. The federal funds futures market

has a 47 percent probability of a rate hike in December and a 55 percent probability in January.

The futures market for the 30-day federal funds rate remains at or below the targeted 0.25

percent level through 2015 and into the first half of 2016. After that date, the market expects the

rate to gradually increase from its current effective rate of 0.13 percent in October to 0.33

percent in March 2016 and 0.44 percent in June 2016, while the October WSJ survey of 50


4

economists project on average that the federal funds rate could reach 0.32 percent by December

2015 and 0.72 percent in June 2016. With the September release of its economic projections, the

FOMC also released the responses from seventeen participants that indicated an average increase

in the target federal funds rate to 1.48 percent in 2016 and 2.74 percent in 2017.

0.00%0.25%0.50%0.75%1.00%1.25%1.50%1.75%2.00%2.25%2.50%2.75%3.00%3.25%3.50%3.75%4.00%

Jan

-08

Mar

-08

May

-08

Jul-

08

Sep

-08

No

v-0

8Ja

n-0

9M

ar-0

9M

ay-0

9Ju

l-0

9Se

p-0

9N

ov-

09

Jan

-10

Mar

-10

May

-10

Jul-

10

Sep

-10

No

v-1

0Ja

n-1

1M

ar-1

1M

ay-1

1Ju

l-1

1Se

p-1

1N

ov-

11

Jan

-12

Mar

-12

May

-12

Jul-

12

Sep

-12

No

v-1

2Ja

n-1

3M

ar-1

3M

ay-1

3Ju

l-1

3Se

p-1

3N

ov-

13

Jan

-14

Mar

-14

May

-14

Jul-

14

Sep

-14

No

v-1

4Ja

n-1

5M

ar-1

5M

ay-1

5Ju

l-1

5Se

p-1

5N

ov-

15

Jan

-16

Mar

-16

May

-16

Jul-

16

Sep

-16

No

v-1

6Ja

n-1

7M

ar-1

7M

ay-1

7

Fed

Fu

nd

s R

ate

Date

Effective Federal Funds Rate (solid bars) and Federal Funds Futures (hatched bars)

SOURCES: Federal Reserve Bank of St. Louis (solid bars) and the

Chicago Mercantile Exchange (hatched bars) as of October 30, 2015

Sales of existing homes increased 8.1 percent during the third quarter compared to the third

quarter of 2014, and it is the fourth consecutive quarterly increase. Median home prices for

existing homes increased 5.1 percent during the third quarter of 2015 compared to a 4.6 percent

increase during the same period in 2014, and the inventory level decreased 3.2 percent over the

same period. All of these factors indicate a strong performance in the national residential real

estate market during the third quarter.

Monthly national employment, as measured by the survey of establishments (Current

Employment Statistics), averaged 142.2 million (not seasonally adjusted) during the third quarter

of this year – an increase of over 3.0 million or 2.2 percent from the third quarter of 2014. The

unemployment rate during the third quarter stood at 5.2 percent (not seasonally adjusted) and a

significant decline from the 6.2 percent in the third quarter of 2014.


5

120,000

125,000

130,000

135,000

140,000

145,000

2010

.1

2010

.2

2010

.3

2010

.4

2011

.1

2011

.2

2011

.3

2011

.4

2012

.1

2012

.2

2012

.3

2012

.4

2013

.1

2013

.2

2013

.3

2013

.4

2014

.1

2014

.2

2014

.3

2014

.4

2015

.1

2015

.2

2015

.3

Pay

roll

Em

ploy

men

t (00

0s)

Quarter

Quarterly U.S. Payroll Employment(not seasonally adjusted)

SOURCE: Bureau of Labor Statistics, U.S. Deparment of Labor

0.0

2.0

4.0

6.0

8.0

10.0

12.0

2010

.1

2010

.2

2010

.3

2010

.4

2011

.1

2011

.2

2011

.3

2011

.4

2012

.1

2012

.2

2012

.3

2012

.4

2013

.1

2013

.2

2013

.3

2013

.4

2014

.1

2014

.2

2014

.3

2014

.4

2015

.1

2015

.2

2015

.3

Une

mpl

oym

ent R

ate

Quarter

Quarterly U.S. Unemployment Rate(not seasonally adjusted)

SOURCE: Bureau of Labor Statistics, U.S. Department of Labor

After experiencing mixed returns during the second quarter of 2015, the stock market

experienced declines during the third quarter attributed to the negative returns in August and

September. All four stock market indices: the Dow-Jones Industrial Average (↓7.6%); the

Standard & Poor’s 500 (↓6.4%); the NASDAQ (↓7.4%); and the Russell 2000 (↓12.2%)


6

experienced declines. Through the first three quarters of 2015, all four stock market indices had

negative returns for the year: the Dow-Jones Industrial Average (↓8.6%); the Standard & Poor’s

500 (↓6.7%); the NASDAQ (↓2.5%); and the Russell 2000 (↓8.6%). After the decline during the

third quarter, the stock market increased in October: DJIA (↑8.5%), S&P 500 (↑8.3%),

NASDAQ (↑9.4%), and Russell 2000 (↑5.6%).

REGIONAL ECONOMY

According to BEA, the region’s economy experienced modest growth in 2014. As measured

by the real gross regional product (GRP), the region’s economy increased 0.3 percent in 2014.

That rate followed no growth in 2013 and a modest increase of 0.2 percent in 2012. The sectors

that contributed to the increase were professional and business services (↑0.8%) and retail trade

(↑2.0%). According to the Center for Regional Analysis (CRA), George Mason University, the

region’s economy as measured by real GRP increased 1.4 percent in 2015 and will steadily

increase from 2.1 percent in 2016 to 3.1 percent by 2019.

4.6%

2.0%1.7%

2.2%

-0.1%

3.2%

1.4%

0.2%

0.0%

0.3%

1.4%

2.1%2.5%

2.9%3.1%

2.9%

-1.0%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Perc

ent C

hang

e in

GRP

Calendar Year

Percent Change in Real Gross Regional ProductWashington MSA

SOURCE: Bureau of Economic Analysis, U.S. Department of CommerceCenter for Regional Analysis, George Mason University

According to payroll employment data from the Bureau of Labor Statistics, U.S. Department

of Labor and based on the survey of establishments, monthly employment in the Washington

area averaged 3,175,530 during the third quarter of 2015 – an increase of 2.7 percent from the

third quarter of 2014.

Monthly payroll employment for the Silver Spring – Frederick – Rockville (SSFR)

metropolitan division averaged nearly 590,000 during the third quarter and was 12,900 above

employment in the third quarter of 2014 (↑2.2%). That rate of growth during the third quarter is

slightly below the growth rate for the entire Washington MSA (↑2.7%).


7

520.0

530.0

540.0

550.0

560.0

570.0

580.0

590.0

600.0

2010

.1

2010

.2

2010

.3

2010

.4

2011

.1

2011

.2

2011

.3

2011

.4

2012

.1

2012

.2

2012

.3

2012

.4

2013

.1

2013

.2

2013

.3

2013

.4

2014

.1

2014

.2

2014

.3

2014

.4

2015

.1

2015

.2

2015

.3

To

tal N

on

Far

m P

ayro

ll (0

00s)

Quarter

Quarterly Total Nonfarm PayrollSilver Spring - Frederick - Rockville Metro Division

SOURCES: Bureau of Labor Statistics, U.S. Department of LaborMontgomery County Department of Finance

Because of the strength in the growth of payroll employment during the third quarter, the

unemployment rate for the division dropped to either the lowest or one of the lowest among the

38 national metropolitan divisions, with a monthly average of 4.1 percent during the third quarter

of 2015 – a decrease from the rate of 4.7 percent during the third quarter of 2014.

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

2010

.1

2010

.2

2010

.3

2010

.4

2011

.1

2011

.2

2011

.3

2011

.4

2012

.1

2012

.2

2012

.3

2012

.4

2013

.1

2013

.2

2013

.3

2013

.4

2014

.1

2014

.2

2014

.3

2014

.4

2015

.1

2015

.2

2015

.3

Une

mpl

oym

ent R

ate

Quarter

Quarterly Unemployment RateSilver Spring - Frederick - Rockville

Metro Division

SOURCES: Bureau of Labor Statistics, U.S. Department of LaborMontgomery County Department of Finance

The resale housing market across the region experienced a growth in prices, on a year-over-

year basis, between August 2014 and August of this calendar year. Based on the S&P/Case-


8

Shiller® Home Price Index for the Washington region, prices in August increased 1.9 percent

over the twelve-month period.

-30.0%

-20.0%

-10.0%

0.0%

10.0%

20.0%

30.0%

Jan-

05

Apr

-05

Jul-

05

Oct

-05

Jan-

06

Apr

-06

Jul-

06

Oct

-06

Jan-

07

Apr

-07

Jul-

07

Oct

-07

Jan-

08

Apr

-08

Jul-

08

Oct

-08

Jan-

09

Apr

-09

Jul-

09

Oct

-09

Jan-

10

Apr

-10

Jul-

10

Oct

-10

Jan-

11

Apr

-11

Jul-

11

Oct

-11

Jan-

12

Apr

-12

Jul-

12

Oct

-12

Jan-

13

Apr

-13

Jul-

13

Oct

-13

Jan-

14

Apr

-14

Jul-

14

Oct

-14

Jan-

15

Apr

-15

Jul-

15

Y-o

-Y P

ct. C

hg.

Month.Year

Year-over-Year Percent Change in

S&P/Case-Shiller® Home Price Index

Washington MSA

NOTE: S&P/Case-Shiller price index is a registered trademark of Standard and Poor's.

As measured by the Consumer Price Index for All Urban Consumers (CPI-U), inflation in the

Washington-Baltimore region increased a meager 0.5 percent on a year-over-year basis in

September of this year over September 2014. Consumer prices excluding food and energy

purchases were up 1.9 percent in the region (on the same year-over-year basis).

-0.5%0.0%0.5%1.0%1.5%2.0%2.5%3.0%3.5%4.0%4.5%

Jan-1

0

Mar

-10

May

-10

Jul-

10

Sep

-10

Nov

-10

Jan-1

1

Mar

-11

May

-11

Jul-

11

Sep

-11

Nov

-11

Jan-1

2

Mar

-12

May

-12

Jul-

12

Sep

-12

Nov

-12

Jan-1

3

Mar

-13

May

-13

Jul-

13

Sep

-13

Nov

-13

Jan-1

4

Mar

-14

May

-14

Jul-

14

Sep

-14

Nov

-14

Jan-1

5

Mar

-15

May

-15

Jul-

15

Sep

-15

Y-o

-Y P

ct.

Ch

g.

Year-over-Year Percent Change in Consumer Price Index

Washington-Baltimore CMSA

All Items "Core"

SOURCE: Bureau of Labor Statistics, U.S. Department of Labor


9

According to CRA, the monthly coincident economic indicator for the Washington

metropolitan region decreased 0.8 percent from July to August after increasing 1.1 percent from

June to July. On a year-over-year basis, the index increased 5.4 percent between August 2014

and August 2015. The coincident index measures the current performance of the region’s

economy and has increased 1.4 percent since December 2014.

100.0

105.0

110.0

115.0

120.0

125.0

130.0

135.0

Jan-

01

Jul-0

1

Jan-

02

Jul-0

2

Jan-

03

Jul-0

3

Jan-

04

Jul-0

4

Jan-

05

Jul-0

5

Jan-

06

Jul-0

6

Jan-

07

Jul-0

7

Jan-

08

Jul-0

8

Jan-

09

Jul-0

9

Jan-

10

Jul-1

0

Jan-

11

Jul-1

1

Jan-

12

Jul-1

2

Jan-

13

Jul-1

3

Jan-

14

Jul-1

4

Jan-

15

Jul-1

5

Inde

x

Month-Year

Washington MSA Monthly Coincident Economic Indicator and Six-Month Moving Average

Coincident Six_Month

SOURCE: Center for Regional Analysis(CRA), George Mason UniversityNOTE: Coincident indicator respresents the current state of the economy and includes total wage and salary employment, consumer confidence, domestic airport passengers, and purchases of nondurable goods.

While the coincident indicator decreased in August, CRA also reported that the leading

economic indicator increased from July to August. The leading index measures the economic

performance of the region six months ahead and increased 0.9 percent and has increased 1.3

percent since December 2014. Based on a modest increase in the region’s real GRP in 2014,

both the recent trends in the coincident and leading indices since December suggest that real

GRP should experience much stronger growth in 2015 (↑1.4%) as estimated by CRA.

95.0

97.0

99.0

101.0

103.0

105.0

107.0

109.0

111.0

113.0

Jan-

01

Jul-0

1

Jan-

02

Jul-0

2

Jan-

03

Jul-0

3

Jan-

04

Jul-0

4

Jan-

05

Jul-0

5

Jan-

06

Jul-0

6

Jan-

07

Jul-0

7

Jan-

08

Jul-0

8

Jan-

09

Jul-0

9

Jan-

10

Jul-1

0

Jan-

11

Jul-1

1

Jan-

12

Jul-1

2

Jan-

13

Jul-1

3

Jan-

14

Jul-1

4

Jan-

15

Jul-1

5

Ind

ex

Month-Year

Washington MSA Monthly Leading Economic Indicator and Six-Month Moving Average

Leading Six_Month

SOURCE: Center for Regional Analysis(CRA), George Mason UniversityNOTE: Leading indicator is designed to forecast economic performance six to eight months in advance and includes residential building permits, consumer expectations, help wanted index, initial claims for unemployment insurance, and purchases of durable goods.


10

MONTGOMERY COUNTY

ECONOMIC INDICATORS

Montgomery County’s economy experienced strong economic performance during the third

quarter of this year. The reasons for this performance include an increase in existing home sales,

an increase in residential employment, a decline in the unemployment rate, and construction of

single-family homes. Because economic data for the County are not seasonally adjusted, the

preferred measure of economic performance for the third quarter is a comparison to the

data for the third quarter of 2014 and not the second or previous quarter.

Employment Situation

Based on data from the Maryland Department of Labor, Licensing and Regulation (DLLR)

and the Bureau of Labor Statistics, U.S. Department of Labor, average monthly resident

employment (labor force series and not seasonally adjusted) for the third quarter in Montgomery

County increased by nearly 9,000 from the third quarter of 2014 (↑1.7%). The third quarter

resident employment count of 526,860 was the highest level on record and nearly 30,000 above

the third quarter of 2009 - the end of the national recession

470,000

480,000

490,000

500,000

510,000

520,000

530,000

2010

.1

2010

.2

2010

.3

2010

.4

2011

.1

2011

.2

2011

.3

2011

.4

2012

.1

2012

.2

2012

.3

2012

.4

2013

.1

2013

.2

2013

.3

2013

.4

2014

.1

2014

.2

2014

.3

2014

.4

2015

.1

2015

.2

2015

.3

Resid

ent E

mp

loym

ent

Quarter

Quarterly Resident EmploymentMontgomery County

SOURCES: Maryland Department of Labor, Licensing and RegulationBureau of Labor Statistics, U.S. Department of Labor

The County’s average monthly unemployment rate during the third quarter declined to 4.0

percent compared to 4.6 percent in the third quarter of 2014. The decline in the unemployment

rate is attributed to a greater increase in resident employment (+9,000) compared to the increase

in the labor force (+5,900).


11

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

2010

.1

2010

.2

2010

.3

2010

.4

2011

.1

2011

.2

2011

.3

2011

.4

2012

.1

2012

.2

2012

.3

2012

.4

2013

.1

2013

.2

2013

.3

2013

.4

2014

.1

2014

.2

2014

.3

2014

.4

2015

.1

2015

.2

2015

.3

Un

emp

loym

ent

Rate

Quarter

Quarterly Unemployment Rate Montgomery County

SOURCES: Maryland Department of Labor, Licensing and RegulationBureau of Labor Statistics, U.S. Department of Labor

Construction Activity

After experiencing very strong growth in residential construction during the third quarter of

2014 attributed to a jump in the number of multi-family construction starts in August 2014,

residential construction declined during the third quarter from the third quarter of 2014 (↓36.4%

in new units and ↓21.4% in value added). The decrease was solely attributed to the decline in the

construction of multi-family units (↓51.2%) while the construction of single-family homes

increased 15.8 percent during the third quarter compared to the third quarter of 2014. While the

total value added for residential construction decreased from $361.1 million in the third quarter

of 2014 to $283.9 million during the third quarter of this year (↓21.4%), that decrease was also

attributed to a decline in the value of new construction for multi-family units (↓43.8%). During

the third quarter, the number of non-residential construction projects decreased 78.3 percent over

the third quarter of 2014, and the total value added declined from $158.5 million to $96.5 million

(↓39.1%). Because of the decline in the construction of both multi-family units and non-

residential projects, the total value of new construction starts decreased in the County by 26.8

percent during the third quarter compared to the third quarter of 2014.


12

$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

$350,000

$400,000

0

250

500

750

1,000

1,250

1,500

1,750

2,000

2,2502010.0

1

2010.0

2

2010.0

3

2010.0

4

2011.0

1

2011.0

2

2011.0

3

2011.0

4

2012.0

1

2012.0

2

2012.0

3

2012.0

4

2013.0

1

2013.0

2

2013.0

3

2013.0

4

2014.0

1

2014.0

2

2014.0

3

2014.0

4

2015.0

1

2015.0

2

2015.0

3

Va

lue

($

00

0)

Sta

rts

(U

nit

s)

Quarter

Quarterly Residential Housing Starts (Units) and Value (Montgomery County)

Starts(Units) Value ($000)

SOURCE: McGraw-Hill Construction and Montgomery County Department of FinanceData are not seasonally adjusted

Residential Real Estate

During the third quarter of this year, sales for existing homes increased 14.4 percent from the

third quarter of 2014. This is the third consecutive quarterly year-over-year increase during 2015

to date. Median sales prices for existing homes decreased 1.5 percent during the third quarter

compared to the third quarter of last year. The increases in sales can be attributed to continued

low mortgage interest rates and a decrease in median sales price for an existing home.


13

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

2010

.1

2010

.3

2011

.1

2011

.3

2012

.1

2012

.3

2013

.1

2013

.3

2014

.1

2014

.3

2015

.1

2015

.3

Sale

s

Quarter

Quarterly Sales of Existing Homes (Montgomery County)

SOURCE: Metropolitan Regional Information SystemData are not seasonally adjusted

Retail Sales

Using sales tax receipts as a measure of retail sales activity in the County, retail sales

increased 4.5 percent during the first eight months of this year. Purchases of nondurable goods,

which include food and beverage, apparel, general merchandise, and utilities and transportation,

increased 4.2 percent during this period while sales of durable goods were up 4.9 percent. The

increase in nondurable goods purchases was largely attributed to the increase in sales of food and

beverage (↑7.6%) while the increase in purchases of durable goods was solely attributed to an

increase in building and industrial supplies (↑8.8%) and hardware, machinery, and equipment

(↑4.9%).

CONCLUSION

The major economic indicators confirm that the County’s economy experienced strong

performance during the third quarter of this year compared to the same period in 2014. The

reasons for a strong performance include an increase in existing home sales, an increase in the

construction of single-family homes and an increase in the value added for construction of

single-family homes. Positive economic indicators also show that the County experienced a

decline in the unemployment rate and an increase in resident employment.


14

SELECTED ECONOMIC INDICATORS Reporting Current Prior Year's Year To-Date Annual

Period Period Period 2015 2014 2014

Leading Indicators

National Sept. '15 -0.2% n.m. n.m. n.m.

Maryland Sept. '15 1.7% 2.0% 1.6% 1.7%

Washington MSA Aug. '15 0.9% 1.1% 2.9% 3.0%

Coincident Indicators

National Sept. '15 0.2% n.m. n.m. n.m.

Maryland Sept. '15 0.2% 3.7% 2.1% 1.8%

Washington MSA Aug. '15 -0.8% 5.0% 1.3% 2.3%

Consumer Confidence Index

National Oct. '15 -4.8% 14.7% 17.8% 18.7%

South Atlantic Region Oct. '15 -9.0% 15.5% 20.5% 24.1%

Consumer Sentiment (University of Michigan) Oct. '15 3.2% 12.6% 4.3% 6.2%

Consumer Price Index

All Items (nsa)

National Sept. '15 0.0% 0.0% 1.7% 1.6%

Washington - Baltimore CMSA Sept. '15 0.5% 0.2% 1.7% 1.5%

Core CPI (nsa)

National Sept. '15 1.9% 1.8% 1.8% 1.8%

Washington - Baltimore CMSA Sept. '15 1.9% 1.8% 1.8% 1.8%

Retail Trade

National (sales - nsa) Sept. '15 1.0% 2.1% 3.8% 4.0%

Maryland (sales tax)(1) Aug. '15 5.8% 4.8% 2.3% 3.6%

Montgomery County (sales tax)(1) Aug. '15 4.9% 4.5% 1.7% 2.5%

Employment

Maryland (labor force data - nsa) Sept. '15 2,979,657 2,934,271 2,970,935 2,926,770 2,929,977

- Percent Change 1.5% 1.5% 0.4%

Silver Spring-Frederick-Rockville (labor force data) Sept. '15 645,571 634,892 646,251 637,333 637,558


Montgomery County (labor force data) Sept. '15 522,387 513,816 523,264 516,133 516,420


Montgomery County (QCEW)(2) Mar. '15 453,967 450,359 453,578 448,536 455,820


Unemployment

Maryland (nsa) Sept. '15 5.0% 6.0% 5.4% 6.0% 5.8%

Silver Spring-Frederick-Rockville (labor force data) Sept. '15 4.1% 4.5% 4.2% 4.6% 4.5%

Montgomery County (nsa) Sept. '15 4.0% 4.4% 4.1% 4.5% 4.4%

Construction

Construction Starts - Montgomery County

Total ($ thousands) Sept. '15 $94,949 $112,970 $890,048 $1,109,005 $1,392,600

- Percent Change -16.0% -19.7% -21.0%

Residential ($ thousands) Sept. '15 $94,660 $72,720 $518,026 $796,310 $935,916

- Percent Change 30.2% -34.9% 0.2%

Non-Residential ($ thousands) Sept. '15 $289 $40,250 $372,022 $312,695 $456,684

- Percent Change -99.3% 19.0% -44.9%

Building Permits (Residential)

Maryland Sept. '15 1,459 1,966 12,636 13,447 17,353

- Percent Change -25.8% -6.0% -4.3%

Montgomery County (units) Sept. '15 672 495 1,654 3,534 3,818

- Percent Change 35.8% -53.2% 8.7%

Building Permits (Non-Residential)

Montgomery County Sept. '15 151 162 1,447 1,434 1,886

- Percent Change -6.8% 0.9% -8.4%

Construction Cost Index Aug. '15 6,914.39 6,969.11 6,945.18 6,929.58 6,944.95

Baltimore -0.8% 0.2% 0.2%

Real Estate

Case-Shiller Home Price Index®(nsa) Aug. '15 214.21 210.22 209.96 207.52 207.67

1.9% 1.2% 4.7%

Maryland

Sales Sept. '15 6,407 5,527 55,059 46,646 65,429

- Percent Change 15.9% 18.0% 2.2%

Median Price Sept. '15 $260,126 $260,348 $259,385 $261,745 $260,899

- Percent Change -0.1% -0.9% -0.2%

Montgomery County

Sales Sept. '15 1,012 884 9,000 8,033 10,612

- Percent Change 14.5% 12.0% -4.0%

Average Price Sept. '15 $504,686 $496,193 $501,843 $506,023 $503,956

- Percent Change 1.7% -0.8% 0.7%

Median Price Sept. '15 $395,000 $390,000 $398,094 $400,544 $400,000

- Percent Change 1.3% -0.6% 0.0%

Average Days on the Market Sept. '15 58 53 58 48 50

NOTES:

(n.m.): not meaningful

(nsa): not seasonally adjusted

(1): Data include miscellaneous and assessment collections.

(QCEW): Quarterly Census of Employment and Wages

(2) SOURCE: Bureau of Labor Statistics, U.S. Department of Labor

Montgomery County Quarterly Economic Indicators October 2015 · Finally, the October WSJ survey of...

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